The State Investment Council has rewritten a vague state loan requirement for the “majority” of a film to be shot here and made it a clear 85 percent, left zero-interest loans on the cutting-room floor in favor of prime plus 1.5 percent, re-cast the makeup of the crew and salaries to require 75 percent be New Mexico residents rather than 60 percent, and required payback in two years instead of three to five.
The SIC has also ended its almost 10-year relationship with a Hollywood consultant who raked in $260,000 to $350,000 a year to advise the board on what projects had a chance of making money. If he had been working on commission, we could have saved a millions.
Meanwhile, the Legislature and governor have green-lighted revised rebates with a $50 million annual cap on the 25-cents-on-a-dollar deals and a phased payout over three years instead of handing out an unlimited amount in a lump sum.
The changes come after tough economic reviews for the state, rough criticism from the industry and extremely limited box-office success for taxpayers.
Since 2002, the state has approved about $240 million in no-interest loans and $228 million in rebates to film and television productions. Only one loan has made any money, and the SIC has estimated a $30 million loss in interest had the cash been conservatively invested instead of handed out for free.
Yes, the film industry has been a hit for the state especially to New Mexicans who have found work on crews or supply materials/services to productions. Yet the folks footing the incentive bill have been waiting for credits to roll to see where, exactly, their money has been going.
It is promising that the state has revised its program to better protect taxpayers and the New Mexicans who work with the industry while providing certainty to the decision makers in the business. But the state, Legislature and/or industry still need to raise the house lights on the rebates so there is a transparent accounting of how much money goes to what kind of jobs and services in which projects.
“Film Incentives 2” is a good sequel, but the state needs a third installment to make it a hit with taxpayers.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.